Economics MCQs

Page No. 272

If PX > MCX, society gains by ?


a raising the price of X.

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b production less X

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cProducing more X

✓


d Increasing the cost of producing X

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View Answer Producing more X

A way of helping depressed regions by having lower wages, lower local taxes and lower unemployment benefit has been suggested as ?


amarket orientated economists

✓


bleft-wing theorists

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c Keynesian

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dNew-Keynesian

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The PFI aims to deliver public projects and services using ?


a Public borrowing

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bThe private sector

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ctime and motion studies

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d foreign labour

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View Answer The private sector

New classical economists advocate reducing welfare payments to people who are unemployed or single parents. The economic reasoning uses was that this would ?


areduce poverty

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b reduce unemployment

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cweaken the power of trade unions

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dhelp small businesses

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According to the Laffer curve as tax rates increase tax revenue ?


ainitially increase and then decrease

✓


bdecrease continuously

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crise continuously

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dinitially decrease and then increase

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According to supply-side economists if taxes are cut so that people have an increased incentive to work and businesses have an increased incentive to invest ?


a aggregate supply will increase , aggregate demand will decrease

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baggregate supply will increase, aggregate output will increase and the price level will decrease

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caggregate supply will increase aggregate output will increase and the price level will increase

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d both aggregate supply and demand will increase and the price level will increase

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A group of economists argue that the real problem with the economy is high rates of taxation and heavy regulation that reduce the incentives to work save and invest these economists are ?


asupply side economists

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bneo-Keynesian economists

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c rational -expectations economists

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dNew classical economists

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The accelerator theory of investment says that induced investment is determined by ?


athe level of national income

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b the level of aggregate demand

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c the rate of change of national income

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d expectations

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According to the paradox of thrift increased efforts to save will cause ?


aan increase in income and an increase in overall saving

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b a decrease in income and an overall decrease in saving

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ca decrease in income but an increase in saving

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dan increase in income but no overall change in saving

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Assuming there is no government or foreign sector the formula for the multiplier is ?


a1/MPS

✓


b1/(1+ MPC)

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c 1 – MPC

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d 1/MPC

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View Answer 1/MPS

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